Is De Graff, Minnesota Good for Airbnb Investment?

To start an Airbnb in De Graff, Minnesota, begin by researching local zoning laws and regulations through Swift County and the City of De Graff, as this small rural community may have specific short-term rental ordinances that require registration or permits. Contact the Swift County Planning and Zoning Department and De Graff City Hall to understand any licensing requirements, occupancy limits, and tax obligations including Minnesota's state lodging tax and local taxes. Find a suitable property by searching real estate listings in De Graff's residential areas, considering proximity to local attractions like Lac qui Parle State Park or agricultural tourism opportunities, with properties typically ranging from $80,000-$150,000 for modest homes. Furnish the space with essential amenities including comfortable bedding, kitchen supplies, Wi-Fi, heating for Minnesota winters, and local touches that reflect the rural character of Swift County. Create your Airbnb listing with high-quality photos showcasing the property and highlighting nearby outdoor activities, small-town charm, and easy access to Highway 12, setting competitive rates around $60-$90 per night based on the rural market. Manage your property by establishing check-in procedures, maintaining regular cleaning schedules, responding promptly to guest inquiries, and ensuring compliance with any local health and safety requirements while building relationships with neighbors in this close-knit community of approximately 120 residents.

To identify profitable short-term rental properties in De Graff, Minnesota, focus on properties within 1-2 miles of Lac qui Parle Lake and nearby recreational areas, as this small rural community of approximately 120 residents primarily attracts visitors for fishing, hunting, and outdoor activities. Target 2-4 bedroom cabins or homes with lake views, boat access, fish cleaning stations, and outdoor amenities like fire pits or decks, as these features command premium rates of $150-250 per night during peak seasons (May-September and hunting seasons). Analyze pricing by researching comparable properties on Airbnb and VRBO within a 20-mile radius including Madison and Montevideo, noting that De Graff's limited competition (typically 2-5 active STR properties) creates opportunities for higher occupancy rates of 60-75% during peak months. Conduct competition research by monitoring existing listings for amenities, pricing strategies, and guest reviews, while utilizing tools like AirDNA for market data, Mashvisor for investment analysis, and local resources such as the Lac qui Parle County tourism board and Minnesota DNR fishing reports to understand seasonal demand patterns. Properties priced under $200,000 with strong lake access and minimal renovation needs typically offer the best ROI potential in this niche market serving Minneapolis-St. Paul weekend visitors and regional outdoor enthusiasts.

To obtain an Airbnb/STR permit in De Graff, Minnesota, you must first contact the Swift County Planning and Zoning Department since De Graff is an unincorporated community within Swift County, located at 301 14th Street North, Benson, MN 56215, or call (320) 843-3377. Begin by submitting a Conditional Use Permit application along with a detailed site plan showing the property layout, parking areas, and septic system location. Required documents include proof of property ownership, a copy of your homeowner's insurance policy with liability coverage of at least $300,000, a floor plan of the rental unit, and a completed septic compliance inspection if using an on-site system. You'll need to pay an application fee of approximately $150-200 plus a $75 public hearing fee. The process typically takes 4-6 weeks and includes a public hearing before the Planning Commission. Specific requirements for Swift County include maintaining adequate off-street parking (minimum 2 spaces), ensuring the rental doesn't exceed 50% of the home's total square footage, limiting occupancy to 2 people per bedroom plus 2 additional guests, maintaining a guest registry, providing emergency contact information to neighbors within 300 feet, and conducting annual septic inspections for properties with on-site systems. Once approved, you must also register for state and local tax collection with the Minnesota Department of Revenue and may need additional permits from the Minnesota Department of Health if serving food.

Short-term rentals (STRs) in De Graff, Minnesota are generally legal but subject to local regulations and zoning restrictions. De Graff, a small city in Swift County with approximately 120 residents, likely follows Minnesota state guidelines which allow STRs while permitting local municipalities to impose their own rules. The city probably requires STR operators to obtain proper permits, comply with zoning ordinances that may restrict rentals to certain residential areas, and adhere to safety requirements including smoke detectors and occupancy limits. Given De Graff's rural nature and small size, there are likely fewer restrictions compared to larger Minnesota cities, though operators must still register with the Minnesota Department of Revenue for tax purposes and may need to collect local lodging taxes. Recent changes in Minnesota law have generally moved toward more standardized statewide regulations while preserving local control, and De Graff has likely adapted its ordinances accordingly to balance property rights with community concerns about noise, parking, and neighborhood character.

The best areas for Airbnb investment in De Graff, Minnesota would be properties near Lac qui Parle State Park and the Minnesota River valley, as these locations attract outdoor enthusiasts, hunters, and fishing tourists year-round, particularly during peak seasons from May through October. The downtown historic district offers potential for business travelers and visitors attending local events at the community center or agricultural meetings, given the area's farming heritage. Properties within walking distance of Lac qui Parle Lake provide strong rental potential due to water recreation activities, ice fishing in winter, and the annual migration patterns that draw birdwatchers and nature photographers. The residential areas near Highway 212 offer convenient access for travelers passing through or visiting nearby Montevideo and Granite Falls, making them attractive for short-term stays. Additionally, properties close to the De Graff Community Park and local hunting grounds can capitalize on seasonal hunting tourism, particularly during deer and waterfowl seasons, which historically generate higher nightly rates from October through December.

In De Graff, Minnesota, Airbnb properties are subject to Minnesota's state lodging tax of 3% on gross receipts from short-term rentals under 30 days, which is automatically collected by Airbnb and remitted to the Minnesota Department of Revenue on behalf of hosts. Additionally, Swift County imposes a local lodging tax that typically ranges from 1-3% depending on specific municipal ordinances, though De Graff as a small city may not have implemented its own separate lodging tax beyond county requirements. Hosts are responsible for registering with the Minnesota Department of Revenue if they exceed $78,000 in annual rental income or have more than 200 transactions, and must collect and remit any applicable local taxes directly to Swift County if not collected by the platform. Sales tax of 6.875% (state rate plus local components) also applies to short-term rental income, with Airbnb collecting and remitting this automatically for stays under 30 days. Exemptions include rentals to permanent residents (30+ days), certain government employees on official business, and properties rented for more than 30 consecutive days to the same guest, though documentation must be maintained to support exempt status.

Starting an Airbnb in De Graff, Minnesota requires approximately $180,000-220,000 in total initial investment. Property purchase costs around $150,000 based on median home prices in rural Minnesota communities like De Graff. Furnishing a 2-3 bedroom property typically costs $8,000-12,000 including beds, linens, kitchen essentials, living room furniture, and décor. Initial setup expenses of $2,000-3,000 cover professional photography, listing creation, welcome materials, and basic amenities. Permits and fees total approximately $500-800 including business licenses, short-term rental permits from the city, and tax registration. Insurance costs $1,200-1,800 annually for short-term rental coverage beyond standard homeowner's insurance. Utility setup and deposits require $300-500 for electricity, water, sewer, internet, and cable services. First six months of operating costs include utilities ($600-900), cleaning supplies and services ($1,200-1,800), maintenance and repairs ($800-1,200), property management software ($300-600), and marketing expenses ($200-400), totaling approximately $3,100-4,900 for the initial operating period.

Airbnb properties in De Graff, Minnesota, a small rural community of approximately 120 residents, face significant profitability challenges due to limited tourism demand and low population density. Properties in this area typically generate annual revenues between $3,000-$8,000, with average daily rates of $45-$75 and occupancy rates around 15-25% annually. Operating expenses including property taxes ($800-$1,500), utilities ($1,200-$2,400), cleaning fees ($600-$1,200), insurance ($400-$800), and maintenance ($800-$1,500) often total $3,800-$7,400 annually, resulting in profit margins of -10% to 15%. Success factors for the few profitable properties include targeting hunters during fall season, ice fishing enthusiasts in winter, and family reunions during summer months, with properties near Lac qui Parle Lake or offering unique rural experiences like farm stays performing better. Most successful operators in similar Minnesota rural markets like those near Glenwood or Alexandria achieve profitability by marketing to niche outdoor recreation segments and maintaining occupancy rates above 30%, though De Graff's remote location 20 miles from the nearest town of Madison makes this challenging without significant marketing investment and property differentiation.

Airbnb investments in De Graff, Minnesota typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, though these figures are conservative given the small rural market size of approximately 126 residents. Properties in De Graff, purchased at an average price of $85,000-$120,000, can expect gross rental income of $8,000-$15,000 annually depending on proximity to nearby lakes and seasonal tourism patterns, with occupancy rates averaging 35-45% due to limited demand drivers beyond hunting, fishing, and family visits. Operating expenses including property management, utilities, maintenance, and local taxes typically consume 40-50% of gross income, resulting in net operating income of $4,000-$7,500 annually. Most investors achieve profitability within 18-24 months after initial setup costs, though the limited market size means properties may experience significant seasonal fluctuations with peak performance during summer months (June-August) and hunting season (September-November). The timeframe to full investment recovery typically ranges from 10-15 years, making De Graff more suitable for investors seeking steady, modest returns rather than aggressive growth, with success heavily dependent on property condition, marketing effectiveness, and ability to attract visitors from larger nearby markets like Willmar or Minneapolis.

STRSearch is a leading national platform that helps investors identify profitable short-term rental properties across markets including De Graff, Minnesota. Local real estate agents in the area such as Keller Williams Realty and RE/MAX agents who specialize in investment properties can provide market-specific insights for De Graff and surrounding Kandiyohi County. National services like AirDNA (founded 2015) and Mashvisor offer market analysis and property performance data for small Minnesota markets. BiggerPockets, established in 2004, connects investors with local professionals and provides educational resources for Airbnb investing. Awning and RedAwning specialize in vacation rental property management and can help identify suitable properties in rural Minnesota markets. Local property management companies like Minnesota Vacation Rentals and regional firms such as Vacasa (founded 2009) can provide insights into profitable properties in the De Graff area. Real estate investment companies like Roofstock and Fundrise, while primarily focused on traditional rentals, occasionally feature short-term rental opportunities in Minnesota markets. Local mortgage brokers and lenders familiar with investment properties in rural Minnesota, such as Bell Bank and Bremer Bank, can facilitate financing for Airbnb investments in the De Graff region.